A young man searches the internet on his laptop for answers about credit card myths.

Debunking Eight Common Credit Card Myths

Published December 17, 2024

9 min read

Table of contents

Key Points:

Outdated information is the reason some common credit card myths persist.
When you understand these common ways your credit card use can affect your credit score, you can create strong financial health.
Some effects on your credit report are only temporary.

Are you credit savvy or trying to get there? Even the most knowledgeable have fallen for rumor or rely on outdated information and advice. We bet there’s at least one myth (if not more) on this list that you think is true.

We’re here to bust these credit card myths for you. The more you understand about credit cards—and how they affect your credit score—the more you can keep your financial goals on track.

Credit Card Myth #1: Applying for a new card will hurt your credit score

Credit card offers come in the mail, email, and social media. They can come at just the perfect time when you need to make an emergency purchase or do a balance transfer for debt consolidation. And students just starting to establish credit are looking for the best cards to build a credit history. But does it hurt your credit score to apply for a new credit card? Not exactly—this is a credit card myth.

When you apply for a credit card, the credit issuer will check your credit history. These are credit inquiries.

A soft credit inquiry (like when you pre-qualify for a credit card) doesn’t impact your credit report. Hard inquiries happen when you apply for a new credit card or personal loan and can affect your credit.

The truth is that hard inquiries usually have a small impact on your credit score—this portion of your score only represents 10% of your total score. Don’t be afraid to apply for a new credit card if you need one. But be aware, if you've applied for a few credit cards in a short period of time, that’s when it may negatively affect your credit score.

If you’re a college student and haven't had a credit card before, you'll need to make sure you can qualify for a credit card on your own. At a minimum, you may need to be 18 years old. And, if you're 18 to 21 years old, you must provide proof of an independent source of income. A secured card or a student credit card might not require a high income or established credit history. The Discover it^® Secured Credit Card helps you build your credit history.¹

Credit Card Myth #2: Canceling unused credit cards will improve your credit score

There are a few reasons you might want to close a credit card—your interest rate has increased, it was a joint account you no longer need, or another card gives better rewards. In these cases, doing the right thing for you and your long-term financial health can lower your credit score. But don’t worry, credit myths like these aren’t so bad. The negative effect of closing a credit card account is just temporary.

If you need to close a credit card account, try not to close your oldest card. Length of credit history is one factor used to calculate your credit score (it accounts for 15% of your total score).

Another way to avoid lowering your credit score when you close a credit card account is to pay off all credit balances to zero. Why? Credit utilization (how much of your available credit you’re using) is another factor in your credit score, accounting for 30% of your score. So, if you bring your utilization to zero and close an account, your utilization is still zero. If you have a balance on one or several cards and you close an account, you’ll mathematically increase how much available credit you’re using.

Credit Card Myth #3: Carrying a balance on your credit card helps build credit

It seems like a double edged sword: use your credit card to build a credit history but keep a credit card balance and your credit score goes down (we’re back to credit utilization as factor in your credit score). What’s worse? Following this credit card myth could have you racking up interest fees that cost you in the long run.

Remember that the amount of debt you have is worth 30% of your overall credit score. The sooner you pay off credit card debt the better for your score (and will have you paying less in interest.)

Credit Card Myth #4: Having multiple credit cards will hurt your credit

The myth that owning more than one credit card can hurt your credit is one of the bigger credit score misconceptions. But where did this idea come from?

It’s not the number of cards you have but how you handle them, and that’s why this myth persists. When you have more than one credit card, it’s important to manage them well. It’s when you misuse them that your credit history may suffer. Common mistakes with multiple cards that can potentially hurt your credit include:

Credit utilization ratio: It raises your credit utilization when you carry debt on multiple cards (which affects your credit score).
Only making minimum payments: Your credit card company will charge you interest on the unpaid balance when you only pay the minimum amount on your monthly statement.
High debt: Not quickly paying off your credit card debt raises your risk of not being able to make payments and reduces your ability to spend your money where you want.
Missed or late payments: It can be tough to juggle multiple payment dates. Late or missed payments are reported to the credit bureaus and can lower your credit score.

Credit Card Myth #5: A high credit card limit is bad for credit

Just like the myth of having multiple credit cards, the myth about having a high credit card limit being bad for credit is also false. But can it become true?

When a credit card issuer gives you a high limit it’s for several reasons:

Your credit history shows you’re at low risk of accumulating debt
You’ve shown the credit card company you have a large income
You have a credit score in the “Exceptional” range

Like most of these myths about credit cards, it’s when you abuse the privilege of credit that you risk harm to your credit history and credit score. While that high credit limit is a good thing, you’ll need to manage it well.

Charge only what you can reasonably pay off in a short amount of time
Try not to reach your credit limit (or exceed it)
Make all payments on time, every time, to show a positive payment history

Credit Card Myth #6: Only paying the minimum card payment can hurt your credit

You’ve had a plan to pay off your full credit card balance this month. But life got in the way and another bill is more urgent. This month, paying off your credit card balance will have to wait, and you’ll only pay a minimum payment. Will it hurt your credit report? Not necessarily.

It’s a myth that only paying the minimum card payment will hurt your credit score. It’s better to make a minimum payment then to make a late or missed payment. However, if you carry those debts for too long and across all your cards it can increase your credit utilization ratio. Plus, the longer you carry the debt, the longer you’re paying interest.

Did you know?

You can use the Discover credit card interest calculator to see what interest you'll owe on any credit card balance and how increasing your monthly payments may help you pay your debt down sooner.

Credit Card Myth #7: Paying your card balance in full can make you appear debt-free

When you pay your statement balance in full by the due date, it’s a good thing because you’ll likely avoid paying interest. And you’d be in good company if you think paying off your balance each and every month would make it look like you’re debt free.

But depending on when you pay and when your credit card company reports your debt to a credit bureau, this is yet another myth about credit scores.

Your credit card payment due date is the day that you must pay at least the creditor’s minimum amount (based on your overall balance). It’s based on the closing date of your last billing cycle. The due date is at least 21 days after the closing date (this is when the credit card statement was generated).

While the effects would have a short-term impact, there could be a slight uptick in credit utilization even if you’ve paid your balance. Let’s look at an example of short-term impact.

Dion has a payment due date of the 21st of each month. However, the credit card company reports to the credit bureaus on the 1st of each month when they generate his bill.

Dion has a balance of $350 this month and it appears as debt on his credit report and his credit score could drop.

However, Dion pays the full $350 statement balance on the 21st through autopay—he avoids late payment fees and interest charges. This is great for Dion’s financial health because he’s saving money on those fees.

The following month, his credit report reflects the decrease in debt and he’s made a repair to his credit score.

Credit Card Myth #8: Checking your credit score will lower it

It’s good to check in on your credit report and credit score for a few reasons. You might detect fraud in your name or incorrect information. It can also give you insight into your chances of receiving new credit if you’re looking for a new card or a personal loan. But will it lower your score if you check it?

This is the last of our credit score myths, and you guessed it: checking your own score won’t lower your credit score. This is because checking your own score is a soft inquiry.

With a Discover^® Card, you get a free Credit Scorecard and important information behind it, like credit utilization, number of missed payments, number of recent inquiries, length of credit history and total number of accounts.

We’ve busted myths from cancelling old cards to making minimum payments on your bills. Now that you know fact from fiction about the eight most common credit myths, you’re better equipped to take charge of your financial journey.

Important Information >

See if you’re Pre-approved before you apply

Check Now

Next steps

See if you're pre-approved

Check Now

View all Discover credit cards

See rates, rewards and other info

Learn More